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The Securities and Exchange Commission’s X Account has announced the approval of a Bitcoin-related investment product. This is not true.
By David Yaffe-Bellany
David Yaffe-Bellany covers the crypto sector.
For 15 minutes, the crypto industry is euphoric.
At 4:11 p.m. on Tuesday, the official X account of the Securities and Exchange Commission announced that regulators had approved a new investment product tracking the price of Bitcoin, an apparent victory for embattled crypto supporters. Coinbase, a giant crypto exchange, posted a celebratory banner. Crypto executives hailed it as a historic day for the industry. Bitcoin’s price spiked.
Then at 4:26 p.m., Gary Gensler, the chair of the S.E.C., posted that the agency’s account had been compromised, resulting in an “unauthorized tweet.” An S.E.C. spokeswoman confirmed the hack in an emailed statement.
The security breach is the latest twist in the crypto industry’s years-long pursuit of an investment vehicle known as an exchange-traded budget pegged to Bitcoin’s value. Since the fall, crypto enthusiasts have been counting down the days until the Jan. 10 deadline for the SEC to debate whether or not to allow an E. T. F. Bitcoin’s value has risen more than 60% in recent months, driven by growing optimism that an approval is imminent.
A widely expected announcement this week, with primary monetary companies such as BlackRock and Fidelity set to launch Bitcoin products. On social media, there was speculation about the exact timing of an endorsement, inspiring memes about the once-obscure activities of the proceedings and the SEC’s momentum. Analysts of E. T. F. al online stardom.
But we’ll have to wait.
“The timing approved the board and trading of Bitcoin spot exchange-traded products,” Gensler said in his message.
The identity of the person who breached the S.E.C.’s account on X remains unknown. But X’s corporate safety account posted a statement saying the hacker had obtained “control over a phone number” associated with the S.E.C.’s official handle on the site. The statement said the S.E.C. had not enabled two-factor authentication, a common security tool that requires an extra layer of verification to gain access to online accounts.
A representative for X did not immediately respond to a request for comment.
The option of a E. T. F. de Bitcoin. It has captivated crypto investors for more than a decade. A E. T. F. es a basket of assets, whose shares are traded on classic exchanges such as the Nasdaq. Investors in a Bitcoin edition would own a portion of a basket containing Bitcoin, sparing them some of the dangers and drawbacks related to buying cryptocurrencies directly.
Crypto enthusiasts have long hoped that the financial product’s approval would draw billions of dollars of new investment to the industry, attracting wealth managers who in the past had hesitated to put client money into crypto.
For years, the S. E. C. resisted the industry’s pleas, arguing that the cryptocurrency market was ripe for manipulation. But in August, the company lost a legal war with one of the corporations hoping to offer the Bitcoin fund, paving the way for its approval.
This legal victory is a rare bright spot in a dark time for the crypto industry. Since mid-2022, crypto costs have plummeted and several giant corporations have filed for bankruptcy, leading to prosecutions by criminals. Gensler has led the opposite rate to the industry, bringing lawsuits against high-profile corporations such as Coinbase and its biggest foreign rival, Binance.
So, the crypto industry was in a position to celebrate when the social media post was posted on the SEC’s official X account on Tuesday afternoon. A short clip gave the impression of a miniature symbol of Mr. Gensler.
“Today, the SEC grants approval of Bitcoin ETFs to its board of directors on all registered national stock exchanges,” the message read. “Approved Bitcoin ETFs will be subject to ongoing monitoring and enforcement measures for continued investor protection. “
In short, Bitcoin’s value rose to about $48,000, before falling closer to $45,000 after the S. E. C. announced the trick.
Stephanie Allen, a spokeswoman for the agency, said “an unknown party” had gained access to the S.E.C.’s account for a brief period shortly after 4 p.m.
“That unauthorized access has come to an end,” he said. “The time will be to work with the authorities and our government partners to investigate the matter and appropriate next steps related to unauthorized access and any similar misconduct.
On social media, online sleuths posted screenshots showing that the SEC account had also liked cryptocurrency-related posts. Cameron Winklevoss, founder of cryptocurrency firm Gemini, accused the firm of “manipulating markets and harming U. S. investors. “
“The timing would hold a public company accountable if it made such a colossal mistake in terms of market movement,” said Sen. Bill Hagerty, R-Tenn. “Congress wants answers about what just happened. “
David Yaffe-Bellany writes about cryptocurrencies from San Francisco. You can reach him on davidyb@nytimes. com. Learn more about David Yaffe-Bellany
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